Title
Recommendation to Authorize the City Manager to Execute a First Amendment to the Agreement with F.H. Black & Company Inc. for Training and Software Support for the Financial Statement Implementation Project, Increasing Total Agreement Compensation by $10,336 for a Total Amount Not-to-Exceed $85,036; and
Adoption of Resolution Amending the Fiscal Year 2023-24 Operating Budget Appropriating $10,336 from the Information Technology Fund. (Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The City of Alameda (City) is subject to annual financial and compliance audits performed by licensed certified public accountants. As a product of this annual audit, the City is required to produce an Annual Comprehensive Financial Report (ACFR) each fiscal year. Due to limited resources, this document has been compiled by the City’s contracted financial auditors up until this year. In an attempt to streamline and expedite this process, the Finance Department has brought the ACFR creation in-house utilizing Workiva software and F.H. Black & Company (FHB) to provide additional implementation support to train Finance staff on using the new software and to provide additional technical support.
BACKGROUND
The City is required by the City Charter Article IV, Section 4-2, various financing covenants, and rules associated with restricted funding sources to publish annual financial statements presented in conformance with Generally Accepted Accounting Principles. These audited financial statements, known as the ACFR, are a comprehensive document reflecting the financial position of the City at the fiscal year-end.
Historically, the Finance Department did not have sufficient resources to produce this document in-house, instead having to rely on contracted auditing staff for document production. In January 2022, the City hired a Controller with extensive auditing and financial statement preparation and production experience. After significant internal discussion between the Controller and the Finance Director, and with the support of the elected City Auditor, the City is now in a position to streamline and expedite this process by bringing this document production in-house using City staff and a new associated software system.
DISCUSSION
From May - September 2023, Finance staff successfully worked with FHB to build the document foundation in the Workiva production software (a document of over 200 pages), in preparation for the first in-house creation of the ACFR. The work included importing trial balances, reconciling differences, finding and correcting inconsistencies, and standardizing the formatting of the ACFR. Project milestones were scheduled and successfully met by both City staff and the vendor. This amendment is being requested to ensure successful completion of both the implementation project and production of the first in-house ACFR, by providing access to prior training videos for staff’s reference, as well as access to ongoing technical support from FHB that may be requested by staff during the creation of the document.
ALTERNATIVES
• Authorize the contract amendment as recommended.
• Modify the scope of the contract and/or adjust the approved contract authorized amount.
• Do not award this amendment and give other direction to staff. Not having this amendment may lead to delays and/or a return of the ACFR compilation to the City’s auditors.
FINANCIAL IMPACT
The original project implementation budget is $75,000 in Project C80800 (Automated Financial Statement Implementation) and there is a remaining budget of $300 as of October 2023. Staff is requesting an appropriation of $10,036 from available fund balance from Fund 606 (Information Technology Internal Service Fund) to Project C80800.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
The ACFR in-house implementation project is consistent with the City’s Climate Action and Resiliency Plan and focuses on paper use reduction. The Workiva software has the capability to link supporting schedules and documents within the software, which allows for review and approval of the ACFR without the need to print the supporting documentation.
RECOMMENDATION
Authorize the City Manager to execute a First Amendment to the Agreement with FHB for training and software support for the financial statement implementation project, increasing the total Agreement compensation by $10,336 for a total amount not-to-exceed $85,036; and
Adoption of resolution amending the Fiscal Year 2023-24 Operating Budget appropriating $10,336 from the Information Technology Fund.
Respectfully submitted,
Margaret O’Brien, Finance Department Director
By,
Ross McCarthy, Controller
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Agreement
2. First Amendment